Lawyers use NHS as £100m cash cow

Lawyers are earning £800 an hour from the National Health Service and taking “indefensible” fees of tens of millions of pounds in legal disputes.

The money is coming from a labour government scheme intended to compensate patients for medical blunders and inadequate care, an investigation has found.

The compensation lawyers are claiming costs and “success fees” worth about £100m a year out of the scheme. In some cases the payouts claimed are 10 times more than the damages won by the patient.

Health professionals warn that it could get much more expensive. There is an estimated backlog of cases against the NHS amounting to £12 billion in claims, of which lawyers could get up to £6 billion.

The NHS Litigation Authority (NHSLA), which operates the compensation scheme, has lambasted the fees in a submission to Lord Justice Jackson, the judge. He is reviewing civil litigation costs.

The document warns that some “no-win, no-fee” lawyers are allowed to charge the NHS compensation scheme £804 an hour to pursue patients’ claims.

It states: “The whole costs structure is indefensibly expensive in relation to the compensation awarded or agreed. It is difficult to believe that it would be sustained were it not for the lack of motivation to change it.”

Mark Simmonds, the shadow health minister, said the huge fees being earned by the lawyers would be better spent on patient care. “It is unacceptable in some cases that the legal fees are many times higher than the awarded damages,” he said.

Bertie Leigh, a lawyer who defends the NHS in litigation cases, said he regards many of the cases he sees as a “buccaneering attack on the funds of the NHS”.

In one case involving Barking, Havering & Redbridge Hospitals NHS Trust, a legal firm claimed nearly £78,000 in costs and fees, having won just £7,000 for a female patient. A Liverpool firm submitted a legal bill for £4.4m for a single case.

The figures for 2007-8 show that more than one in four NHS trusts are paying out more in legal costs than in damages. The clinical negligence scheme paid £264m in compensation in 2007-8 of which £90m was in claimants’ fees.

Compensation lawyers say the success fees help to cover the cost of fighting cases they lose.